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Wall Street Trader Invests in Second Career to Transform State Social-Services Industry

May 13, 2009

John Maltby

Image credit: Eileen Barroso / Columbia University

John Maltby began his Wall Street career in 1972, when traders used ledger sheets and calculators. He was there during its boom years, as computers and new financial products transformed the industry. And last year he observed its dramatic collapse.

Now, Maltby, 59, who recently left a successful career as a hedge fund executive, wants to apply the lessons he learned from the Street to something far closer to his heart: social services for the developmentally disabled. He will earn a master’s degree next week from Columbia’s School of Social Work.

Unlike some civic-minded moguls who give money to charities and simply hope for the best, Maltby is plunging into a second career in the non-profit world, in an effort to help fundamentally transform New York State’s social-services system. Rather than continue steering developmentally disabled individuals into group homes and sedentary lifestyles, Maltby wants to empower them with independent-living situations and wage-earning jobs that support the nation’s economy.

“People with disabilities have the same needs, desires, strengths, sorrows and happiness that we have," says Maltby, who was inspired by his 35-year-old son, Andrew, who lives semi-independently despite his autism and seizure disorder. Maltby argues that disabled individuals should receive assistance only for the personal problems they struggle with, rather than receiving the “panoply” of services offered by large group homes, which he contends can do more harm than good.

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“I started getting a gradual frustration when I realized things could be better, and should be better,” he says, “and I guess I had the personal arrogance to say that I can help make it happen.”

Maltby is convinced he can help revolutionize a system that he says is overly dependent on institutionalization, generic social agencies and medical solutions for non-medical issues. He plans to tackle these using the skills he amassed in his 35 years on Wall Street.

The British-born Maltby was a trader for Goldman Sachs and AIG before being appointed chief investment officer for the hedge fund DKR Capital, a job he held from 2001 until 2006. He grew up in Hove, England, before moving to New York at age 22 to work on Wall Street and now lives in Sleepy Hollow, Westchester County. This past semester he began teaching a class on hedge funds as an adjunct professor at Columbia’s business school.

Just after graduation, Maltby will become a program director for the Westchester Institute for Human Development, which provides medical and social services for people with developmental disabilities. He has already worked at the institute as an intern, as part of the social work school’s emphasis on field work.

Maltby sees four things that need changing in the system. Just as hedge funds use personal brokers to communicate with giant investment banks, disabled individuals must have access to people—brokers, if you will—who are sensitive to their individual needs, he says.

“Say, God forbid, something happens to your parents tomorrow,” he posits. “You would have to relearn an entire system by yourself. But brokers could add catalytic expedition to the process.”

Second, the state government must support social-enterprise programs to promote job creation for the disabled, he says. While such “low-profit” programs would be designed to make money, he says, they could be structured to earn tax concessions and other preferential treatment from Albany because of their social benefits.

Third is the crucial role technology can play. In recent years, Maltby has witnessed technological advances that have dramatically enhanced the organization of investor portfolios. He says social workers must harness the available technology to organize their own clients’ individualized service schedules and funding sources.

Last, and most important, he says group homes should be decentralized — that is, substituted with more independent living arrangements — much as trading floors decentralized over the last decade as a result of the Internet. Such a recalibrated living system could save money while empowering people who have been pitied for too long, he says.

“People with disabilities should be in charge of their services,” says Maltby. “They should be directing their own lives, and they should have jobs, rather than being someone else’s job.”

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In Memoriam: Harvey J. Goldschmid

Columbia Law School Professor Harvey J. Goldschmid ’65, a renowned corporate governance expert who served as a commissioner and the top attorney at the U.S. Securities and Exchange Commission and played a key role in implementing one of the most sweeping federal securities laws in U.S. history, died on Feb. 12. He was 74.

Goldschmid, the Dwight Professor of Law, was an alumnus of Columbia Law School and Columbia College. He joined the Columbia Law School faculty in 1970 and became the Dwight Professor of Law in 1984.